Learn What A Shelf Corporation Is And How It Works

First of all, let's tackle what an LLC is. In the legal sense in just about all of the United States, the LLC is a kind of business company that offers limited liability to its owners. It is mistakenly called a limited liability corporation by many people instead of the proper term which is a limited liability company.

It is a business that has a hybrid nature and it has the characteristics of not only a corporation but a partnership as well. This provides more flexibility for the owners as they only have a limited liability for the debts and the actions of the company. The LLC is better suited for the smaller company that only has a single owner. The LLC is rather a new type of business entity here in the United States.

Adopted in Wyoming in 1977, now LLCs are able to be created in every state of the union. The LLC is seen as a way to help the small business gain the benefits that are enjoyed by large corporations; it still allows them to keep a small business model of ownership.

What exactly does limited liability mean for those of us who are not savvy in legal terminology? Once the small business decides to become an LLC, the owner of the business is much less responsible for prosecution and other debt issues which may plague the business. If bankruptcy has to be declared, the business owner can rest assured that his or her personal finances will not be caught up in the problems of the business.

Now on to the next subject which is a shelf corporation. This is also known as an aged corporation. It is called this because it has had no activity. It was formulated and, as it were, put on the shelf to mature. This corporation may then be sold to someone who would rather have an aged corporation and simply not a brand new one. A business entity that has been created by a means other than incorporation is simply known as a shelf company.

What are some of the reasons that a person would want to buy a shelf corporation? Some of them may include the following:

- To act as a time saver. It takes time to create a new corporation.

- There would be the chance to bid on contracts. Some places may require a certain time limit for the company to be in business before it can do this.

- It may appear that the business has been around for a long time which may add to investor or consumer confidence.

- It may be easier to acquire investment capital.

- It may be easier to obtain corporate credit.

There are a number of websites on the Internet that make it their business to produce and sell shelf corporations. This will assure that the new buyer can have a corporation that has a long history while at the same time being able to have entire control over setting up the corporation's shareholder profile and its board of directors.